On the cover of Barron’s magazine this week, there is a declaration that the PC is dead. Barron’s argues that growth for Apple and Google tablets and smartphones is forcing Microsoft and Intel to scramble to remain relevant.
Just how prescient is this? Mobile users grew so fast that there are now more mobile users than computer users. Barron’s could be jumping the shark on this negative call on WinTel, especially on the eve of the launch of Windows 8, Windows Surface, and Windows Phone 8.
The move towards cloud computing will continue, making devices of any kind “dumb terminals” that just access data. This makes Microsoft behind: its Azure cloud platform still represents a small part of Microsoft’s business. Intel benefits from cloud computing growth: its chips are used to power servers. Intel continues to bring innovation for its Atom-line of processors, focusing on lower energy usage without compromising on processing power.
On the downside, Microsoft is behind Google on search and on online advertising. Microsoft was able to generate growth in online advertising and services, but it is far slower than that of Google. Still, Microsoft aggressively touted that Bing helped users find better search results than Google. The Bing It On Challenge brought in over 10 million users.
Office remains the most-used productivity software in the world. Some users consider themselves as power-users. When Office 2013 is released in 6 months, the software will be a must-have for enterprise customers. By that time, Windows 8 tablets might be more mature, and more usable for Office productivity work.
Surface for Windows RT and Windows 8 Pro
Windows Surface will be by far the most important event for Microsoft and to a lesser extent, Intel. Details on Surface RT were leaked last week: the device will be powered by an ARM processor and will cost $499 without a cover keyboard. RT is designed for mobility, and will have a longer battery life. The tablet will have Office pre-installed, along with SkyDrive, built-in Mail, messaging, and photo viewing.
Enterprises will likely prefer Surface for Windows 8 Pro, which runs on an Intel processor. It will be slightly heavier (1.99 pounds compared to 1.5 pounds) and will be slightly thicker (0.49 inches compared to 0.36 inches on the RT).
PC makers will not be far behind introducing tablets and convertible tablets to consumers. Intel said there are over 100 Ultrabook designs running Windows 8. 40 of them will be touch-based. There will also be tablet designs that will have detachable keyboards.
Long Live PC
Barron’s call that computer makers will fade is, for the time being, greatly exaggerated. Dell and HP are facing a drop in sales, but some of that is due to the company’s failure to innovate its designs. In the last quarter, Asus and Lenovo managed to grow market share.
Why was that?
Asus is already planning to have a Windows 8-based tablet ready when the new operating system is released. When the PC sector tried to reinvigorate the market by touting Ultrabooks, the initiative failed because prices were too high, and the benefits over ordinary laptops were minimal. This time around, Windows 8 will give users a fresher way to interact with the operating system. Data will span across several access points, too. Microsoft is pushing suppliers to innovate in the design of Windows 8-based devices. Mainstream pricing for Ultrabooks are now in the US $699 range. Renewed interest in PC’s will prove to be possible, but it needs an innovative company to lead it. That company is Microsoft.
Further Perspective: Bill Gates on Windows 8 and Surface.